Firedepartment makes audit progress

Published on Thu, Jul 7, 2005 by ack Kintner

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Fire department makes audit progress

By Jack Kintner

Auditors from the Washington state auditor’s office wrote in a recently released audit report on Whatcom County Fire District 13 that while progress has been made on issues identified in a special audit completed in December of 2003, there is still work to be done before district administrative procedures get a clean bill of health.

The report let stand the sole finding from the special audit, that Whatcom County Fire District 13 “made inadequately supported payments to North Whatcom Fire and Rescue Services (NWFRS).” While recognizing that efforts have been made to resolve the issues identified in the previous finding, according to the report. “District [13] did not take action to completely resolve the prior issue,” the report read. “We reaffirm the finding.”

The issues referred to in the earlier special audit, which covered calendar years 2002 and 2003, include the following:
- Individual districts made payroll payments for NWFRS without documenting the benefit this provided to the districts.
- District 13 at one time loaned $140,000 to NWFRS without putting it in writing, including a repayment schedule. Not all of the required $1,000 monthly payments were made.
- District 13’s assets were used to secure $186,456 in equipment lease agreements that were signed by an employee of NWFRS but not authorized by the district 13 board of commissioners.
- NWFRS was over $50,000 in arrears in lease payments on shop space to district 3.
- NWFRS used district 13 assets to secure a $150,000 line of credit that was used in part to make payments on the above leases.
Whatcom County fire districts 3 (rural Lynden) and 5 (Point Roberts) were also mentioned because they were a part of the interlocal agreement with district 13 that formed the NWFRS in June of 2001. District 5 withdrew from the agreement in January of 2004 and does not appear in the present report.

A finding, as opposed to an exit interview item or a management letter, is the most serious of the three kinds of discrepancies an audit may cite, according to the Washington state auditor’s office and if left unremedied can affect a fire district’s bond rating.

Incoming NWFRS chief Tom Fields said he agrees with the auditor’s report. “The way [NWFRS staff] were doing the accounting made it difficult for the auditors to track,” Fields said, “because they were using a poor bookkeeping and accounting system, so we’re fixing it.” Fields was retained as a management consultant by NWFRS following the special audit. At the time he was serving as chief of the Camano Island Fire Department. He began as chief at NWFRS the first of June.

A further complication arose for the two-person team when they arrived at the NWFRS office the morning of last December 14 to begin the work for the report they’ve just released. Then NWFRS finance director Diane DeFries fired administrative assistant Benita Williams shortly after the team arrived, and her fellow office employee Kristi Heutink resigned a few minutes later, leaving the audit team with no office staff to help them find records.

Two weeks later the NWFRS board of directors dismissed DeFries by not renewing her contract and re-hired Williams, who still works there.

In response to this most recent report, Fields said that the agency is now using “a complete double-entry accounting system with its own software that replaces the old self-designed system that used Microsoft Excel spreadsheets. Anyone with bookkeeping or accounting experience should be able to look through the books and find what they want.” He added that the new system allows accounting to be done under the requirements of the state’s Budget and Accounting Reporting System, or “BARS.”

Fields also said that the payroll issue has been taken care of with a new reallocation formula that NWFRS will adopt at its July 12 board meeting. “That goes along with a new purchase order system and a new way of reporting all this to the board every month. We will also balance our books with those of Whatcom County on a monthly basis,” Fields said.

The state of audits district 13 every two years. “At our next full audit,” Fields concluded, “our goal is to have zero findings, zero management letters and zero exit items.”